Fund hopping condemned

A group of medical specialists who advised patients to switch
health insurers to exploit a better deal on gap charges created a
surge of claims which blew the budget of a small health fund, a
federal parliamentary committee has heard.

The group of doctors, in an unnamed regional city, persuaded
several members to transfer to a local fund whose benefits reduced
out-of-pocket costs for obstetric care by up to $1000.

The influx of new members making big claims was "well beyond"
the Queensland Country Health fund's budget, partly prompting a 30
per cent rise in its premiums, the House of

Representatives committee on health funding heard yesterday.
The chief executive of the Private Health Insurance Administration
Council, Gayle Ginnane, said doctors should be subject to the same
$50,000 penalties facing health funds that diverted members to
reduce their costs.

Her remarks came after the private health insurance ombudsman,
John Powlay, gave details of a pregnant woman who had been told by
her obstetrician's receptionist that the doctor did not use the "no
gap" scheme offered by her existing health fund.

The patient was informed that if she switched to the local fund,
her out-of-pocket costs would be reduced from $1500 to $500.

Mr Powlay said the local fund had revealed that most of the
claims for gap benefits it received had come from specialists
associated with a practice which included the woman's
obstetrician.

He said it was not appropriate for doctors to advocate patients
transfer to a particular health fund simply to take advantage of
gap scheme arrangements for a particular treatment.

The president of the Australian Medical Association, Mukesh
Haikerwal, rejected the call for penalties against doctors for
advising patients to change funds.

He said the health funds "need to get their house in order" and
offer benefits the market wanted and which the fund could
afford.

The committee, chaired by the Queensland Liberal Alex Somlyay,
also heard evidence about doctors' failure to gain patient consent
to their bills beforehand, and a call for much greater public
disclosure about private hospitals' financial and clinical safety
performance.